True Costing in Logistics and Supply Chain Management
The presentation “True Costing in Logistics and Supply Chain Management: How do we make decisions based on True Economic Trade-Offs (T-ETOs)?” by Jan Jansen (see the article True Costing in Logistics & Supply Chain Management: How do we make decisions based on True Economic Trade-Offs (T-ETOs)? | Proceedings of London International Conferences (londonic.uk))
This presentation emphasizes the need for a more holistic view of costs in logistics to make better-informed decisions that consider financial, social, and environmental factors. The key points:
- Decision-making challenges: It discusses the complexity of decision-making in logistics and supply chain management (SCM), which often relies on traditional cost-price information that excludes externalities like social and environmental impacts.
- Integrated trade-offs: It advocates for an integrated approach to decision-making that includes both traditional costs and the costs of externalities, utilizing concepts like shadow prices and the Lagrange multiplier (λ).
- Case studies and examples: It provides case studies from the last decade and an example comparing the trade-offs between a diesel truck-tractor and an electric truck-tractor, highlighting the lack of track record in the industry for such decisions.
- Further research: The further applied research about true pricing in logistics is needed to make external effects measurable and facilitate sound business decisions based on comprehensive data.
